June 19, 2009

India's trade ministry is likely to soon approve a proposal from the food ministry to allow the export of 650,000 tonnes of wheat products.

 

"A proposal from the food ministry has been received and we are in favour of allowing the exports," a senior trade ministry official, who didn't want to be identified, told Dow Jones Newswires.

 

A formal order allowing the exports is expected by next month.

 

India had banned the exports of food grains, including wheat, in 2005 and followed it up by banning food grain product exports in 2006. Both the bans were extended in December 2007 indefinitely.

 

Procedural issues regarding relaxation of the ban are being sorted out by the new federal government, which came to power in May, the official said.

 

Since coming to power, the Congress Party-led ruling coalition has been assessing the food grain stocks afresh before allowing exports as it has promised to distribute more grain under welfare schemes for the poor.

 

The official said wheat availability wasn't a problem as the government's buffer stocks have reached a record 24.4 million tonnes as of mid-June.

 

State-run granaries are finding it hard to find enough storage space.

 

Traders said they were hopeful the ban on wheat products would be eased soon, adding they have already started talking to potential customers.

 

"Once the notification is out and the modalities are known, we will work out the future course. As such, we have started tapping our old customers," Veena Sharma, secretary of the Roller Flour Millers Federation of India, said.

 

In the past, Indian millers exported wheat products to Indonesia, Myanmar, Sri Lanka and Bangladesh, she added.

 

Sharma, however, said it would be a difficult task for Indian millers to convince overseas customers to buy again from India as exports from the country were "abruptly ended."